In last week’s episode, we tried to put a biblical lens over socialism. Let’s review a moment. The socialist playbook begins with 1) perverting justice by claiming that economic justice means equal outcomes instead of equal opportunities, , 2) fans the flames of sinful envy of the rich, 3) deceives naive citizens into surrendering their political power to socialist leaders and supporting their totalitarian rule to force economic equality and 4) causes horrific suffering especially of the poor because socialism as an economic system always fails. But is capitalism really any better? Isn’t capitalism based on greed? Isn’t its whole motivational system based on the love of money, which Paul said was the root of all kinds of evil. Doesn’t it incentivize the rich to victimize the poor? Having put a biblical lens over socialism last week, this week we seek to put a biblical lens over capitalism.
Some years ago, a group of Christians left the Washington DC area for a summer visit to Romania where they conducted seminars for the Romanians on how to start businesses. After 50 years of Marxist socialism the Romanians had no sense of how a market economy works or how to be successful entrepreneurs. Instead of starting these seminars by claiming that the Romanians would soon be making buckets of money and driving Mercedes, these instructors began with a biblical perspective on ownership, work, labor, business investing, and greed. If you had been part of the group doing this seminar, what would you have said? What does the Bible have to say about private property, vocational work, making money, rewards for labor, and protecting the weak from exploitation? Let’s begin with 3 foundational parts of a biblical economy required to promote human flourishing.
A. PRIVATE OWNERSHIP OF RESOURCES: Vital Stewardship Principle
Two of the Ten Commandments assume the right of private ownership of property. The eighth Commandment, “You shall not steal,” not only assumes private ownership, its main purpose is to protect private ownership. The tenth Commandment prohibits coveting our neighbor’s property. “You shall not set your heart desire on your neighbor's house or land or anything that belongs to your neighbor.” Neither of these commandments makes sense unless there are some things that rightly belong to other people. So private ownership is built into the bedrock of the biblical understanding of work, labor, and economics.
Private ownership goes beyond personal property to include our time, our treasure, and our talents. With this concept of ownership comes the biblical concept of stewardship. Jesus explained this principle: Everyone to whom much was given, of him much will be required, and from him to whom they entrusted much, they will demand the more. To whom much is given, of him much is required
(Luke 12:48). Biblical economics is rooted in taking personal responsibility for what belongs to me and investing it wisely for the Master. Jesus gives a fuller explanation in Matthew 25, via The Parable of the Talents.
“For it will be like a man going on a journey, who called his servants and entrusted to them his property. To one he gave five talents, to another two, to another one, to each according to his ability. Then he went away. He who had received the five talents went at once and traded with them, and he made five talents more. So also he who had the two talents made two talents more. But he who had received the one talent went and dug in the ground and hid his master's money. Now after a long time the master of those servants came and settled accounts with them. And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here, I have made five talents more.’ His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here, I have made two talents more.’ His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed, so I was afraid, and I went and hid your talent in the ground. Here, you have what is yours.’ But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed? Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. So take the talent from him and give it to him who has the ten talents.
This concept of taking personal responsibility for stewarding well what belongs to me (what I own) is the foundation of biblical economics. This includes my time & talent (labor) and other resources (property and money). Peruvian economist Fernando De Soto argues conclusively that there is a very strong link between the wealthy countries like the US, Europe and their strong property laws, while poverty-stricken nations have virtually no laws protecting private property. In fact, a group of researchers decided to compare a country’s property protection legislation to the nation’s GDP per capita. It turns out there is a striking correlation between private ownership protection and economic prosperity (per capita GDP).
B. FREEDOM to INVEST RESOURCES to Develop Earth’s Potential
The economic system intended by God is also rooted in the original purpose for which God created humans, revealed in Genesis 1:28. And God blessed them. And God said to them, “Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.” Although we might assume that God has ended his creative process after the sixth day of creation, there is a sense in which God is still creating through humana completing two tasks assigned to them.
- Task # 1: Generating life by reproducing so that the earth is filled. In the words of the ESV study Bible, “God's creation plan is that the whole earth should be populated by those who know him and who serve wisely as his vice Regents or representatives.”
- Task # 2: Developing the potential that God built into the world by cultivating the garden. Adam and his posterity continue God's creative work of ordering, i.e. shaping the material of creation by “subduing the earth.” God’s design to provide humans with the sustenance to flourish was not just a lush garden full of fruit trees; it was a plan for them to “subdue” the earth. The command “to subdue” implies that, although all that God made is good, it is, to some degree, underdeveloped. God left creation with deep untapped potential for cultivation that humans are to unlock through our labor. Tim Keller elaborates:
We are not to relate to the world as park rangers, whose job is not to change their space but preserve things as they are. Nor are we to “pave over the garden” of the created world to make a parking lot. No, we are to be gardeners who take an active stance towards their charge. They do not leave the land as it is. They rearrange it to make it more fruitful, to draw the potentialities for growth and development out of the soil. They dig up the ground and rearrange it with a goal in mind: to rearrange the raw material of the garden so that it produces food, flowers, and beauty. And that is the pattern for all work. It is creative and assertive. It is rearranging the raw materials of God’s creation in such a way that it helps the world in general, and people, in particular, thrive and flourish (Every Good Endeavor).
God’s command to Adam and Eve to “have dominion” includes the world of relationships that will emerge as Adam and Eve's children multiply and specialization of labor evolves. This ongoing development requires working out a just exchange of goods and services, i.e. an economic system. This developmental process thrives when individuals have the freedom to invest their money in tools to increase efficiency. This is a “capital” investment. Consider the rudimentary example of a potato farmer:
- Year 1: By his bare hands he plants and harvests 1000 potatoes and sells them for $100.00. He takes $20.00 of his $100 to buy a shovel
- Year 2: With the shovel he plants and harvests 5000 potatoes and sells them for $500. He takes $50 of his $500 to buy a wheelbarrow.
- Year 3: With the wheelbarrow and shovel he plants and harvests 10,000 potatoes and sells them for $1000. He takes $100 from the $1000 to rent a tractor during the planting and harvesting process.
- Year 4 With the wheelbarrow, shovel and tractor rental he plants and harvests 50,000 potatoes and sells them for $5000.
Private ownership and the freedom to invest in tools maximizes his efficiency and income from his work. This is the original meaning of capitalism—investing a portion of our income in tools to become more efficient. This freedom to use profits to invest capital is God’s design for cultivating the garden, causing mankind to flourish. Capital investment is the key to creating greater wealth in any society.
C. A FREE MARKET
Think of the economy as a stage where people connect with each other and the created world. It is the place where individuals, families, businesses, and all kinds of other institutions interact with each other to exchange goods and services. The biblical description of many facets of economic life assumes a free market, e.g.:
- The plowman should plow in hope and the thresher thresh in hope of sharing in the crop (1 Cor 9:10).
- Do you see a man skillful in his work? He will stand before kings; he will not
stand before obscure men (Prov 22:29). - Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty. (Prov 28:19).
- If anyone is not willing to work, let him not eat. (2 Thess 3:10).
- House and wealth are inherited from fathers (Prov 19:14).
The core principle of God’s economic system for a business or worker to thrive is servanthood. Whoever brings blessing will be enriched, and one who waters will himself be watered (Prov 11:25). The only path to long-term success in labor is serving your boss and in business is serving your customer—providing goods or services the customer needs. Thomas Edison said, “I find out what the world needs…Then I proceed to invent it” (Jay Richards, Money Greed and God, p 130) This process of “product producers” and “product needers” finding each other requires a free market in order to connect them.
As individuals create new products, because of God’s enormous creativity, humans assign different value to different products. One man puts his money into a new car, another into a nice house. Maximizing the economic value for everyone, requires a free market. A free market encourages and allows the most flourishing to happen, i.e. humans obtain the most economic value from the products sold.
Ecnomist Jay Richards illustrates, this principle by going back to his 6th grade class. His teacher passed out a different toy to each student, things like silly putty, a paddle ball, Barbie trading cards (This WAS a while ago!) She then asked each student to rank their toy. If they really liked their toy, they gave it a ten. If they hated it, a one. Most started out somewhere in the middle. The teacher then added up the total of all the points given to the toys and wrote it on the board (This was the total economic value to society). Then, the teacher allowed them to freely trade their toy with anyone else in their row. Some kids traded and some didn’t, but everyone had the freedom to if they wanted to. She then asked the students to, once again, rank whatever toy they had from one to ten. When the teacher wrote the new total on the board, it was a higher number even though it was all the same toys. (The total economic value increased). Then she allowed the students to trade with anyone else in the entire classroom, as many times as they wanted. Lots of toys started changing hands. And, you guessed it, when everyone ranked their toys after this round of trades, the total number went way up this time. The total economic value to this society skyrocketed.
This little exercise with a bunch of silly toys demonstrates the value of a free market. Almost everyone ended up better off than they started, and no one ended up worse off. All of us experience something similar each day. We buy groceries when we want or need them more than the money they cost. And the grocer will only sell them to you if he wants the money more than he wants the groceries. Both sides benefit. A free market is the economic structure that best allows producers of products to focus on meeting the wants of consumers. It isn’t perfect, but capitalism maximizes the economic freedom required for flourishing.
COMPARING GOD'S DESIGN FOR ECONOMIC FLOURISHING TO CAPITALISM
Comparing the above three characteristics of a biblical economy that promotes flourishing to Merriam Webster’s Dictionary definition of capitalism reveals that there is a direct match. Webster says capitalism is:
- “an economic system characterized by private or corporate ownership of capital goods”—Scripture protects private ownership and stewardship.
- “by investments that are determined by private decision”—Scripture calls humans to the task of investing our labor and resources to develop the potential of earth.
- “and by prices, productions, and the distribution of goods that are determined mainly by competition in a free market”—Scripture assumes a free market for economic flourishing.
Let’s compare these three characteristics of God’s prescribed economic system with socialism:
- Bible & capitalism: private ownership of land and economic resources.
- Socialism: public ownership of land and means of production.
- Bible & capitalism: freedom of individuals to make capital investments and innovate to keep up with customer demand (great efficiency).
- Socialism: totalitarian state must divert resources for capital investments and innovations to keep up with customer demand (great inefficiency).
- Bible & capitalism: freedom of market economy brings great flourishing.
- Socialism: totalitarian control of economy brings great destruction.
Does a market economy open the door to greedy people getting rich? Yes. The freedom of God’s economic design does not stop greedy people. But there are greedy people in every society. A system designed to maximize the flourishing of all doesn’t stop the greedy. But the biblical economic system is not unbridled capitalism; it is not unlimited freedom in the marketplace. The biblical economic system for flourishing is a market economy combined with the rule of law.
THE RULE OF LAW
1. Protections for Private Property. Exodus 20:15 You shall not steal. Since the moral law of God is written on every heart, the concept of private property is written on every human heart. We also see private ownership of property protected in Deuteronomy 19:14: "You shall not move your neighbor's boundary stone.” This includes protecting intellectual property through patent laws, and laws against plagiarism.
2. Laws Requiring Honesty in Business Dealings Leviticus 19:36 You shall have just balances, just weights, a just ephah, and a just hin.
3. Biblical Requirement for Wealthy to Provide for the Poor. The poor in Israel were provided for by requiring that landowners not reap to the edges of their fields, or strip their fields bare through multiple harvests—but to leave a portion behind for the poor and the alien. A biblical view of a market economy must find a way to require the rich in some equivalent way to provide for the poor and destitute. At this point just believing in capitalism is not enough.
- “When you reap the harvest of your land, you shall not reap your field right up to its edge, neither shall you gather the gleanings after your harvest. And you shall not strip your vineyard bare, neither shall you gather the fallen grapes of your vineyard. You shall leave them for the poor and for the sojourner: I am the Lord your God (Lev 19:9-10).
- “You shall not oppress a hired worker who is poor and needy, whether he is one of your brothers or one of the sojourners who are in your land within your towns. You shall give him his wages on the same day, before the sun sets (for he is poor and counts on it), lest he cry against you to the Lord, and you be guilty of sin (Deut 24:14-15).
4. Market Freedom Restricted. The Bible does not support a completely free market system because of the Biblical teaching regarding man’s depravity. The powerful will use their power to exploit the weaker. Anti-trust laws in America are designed to protect economic competition and maintain a free, open marketplace. These regulations are designed to prevent large corporations from abusing market power. Such laws:
- Prevent Monopolization: Outlawing predatory tactics used to unfairly destroy competitors and dominate an industry.
- Ban Collusion: Stopping rival companies from conspiring to fix prices, rig bids, or divide markets.
- Regulate Mergers: Reviewing and blocking large corporate mergers that would substantially lessen competition.
- Promote Fair Play: Eliminating deceptive and deceptive business arrangements that restrict open trade.
Another way that just laws restrict the market for business owners is laws against price gauging during a natural disaster. Most state laws go into effect only when an official state of emergency or disaster is declared by the governor or president. The restrictions typically cover life-saving and essential needs, such as:
- Food and bottled water
- Gasoline and other fuels
- Medicine and medical supplies
- Housing, rent, and hotel rooms
- Building materials and repair services
A third way that market economies have been restricted by Christians is through laws preventing usury. The prohibitions against lending at interest seem to reflect a common experience throughout history—those forced to borrow money or sell themselves into slavery to survive. Notice the context of the prohibition against money lenders in Leviticus 25:35-37. If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. We are never to exploit a brother in need by lending at interest. In fact, Jesus challenges us not to even lend at all but to love destitutes brothers and sisters so much that we give freely to them.
But loaning to a destitute brother in need is not the same as taking our talent and investing it for profit, as Jesus taught us to do in Matthew 25.
So, does the Bible teach capitalism—yes and no. In sharp contrast to the evil of socialism, capitalism is rooted in the same 3 core biblical concepts: stewardship, responsibility, investing our labor and other resources to develop the earth’s potential, and a market economy that enables business owners to serve others. But unbridled capitalism is not what the Bible teaching, but only a free-market economy regulated by the rule of law.
For Further Prayerful Thought.
1. What do you think is the relationship between owning private property along with other resources and the foundational principle of stewardship in the economy of God’s design?
2. How does the concept of making a capital investment in tools to increase our efficiency seem like a wise component of accomplishing our task of developing the potential built into planet earth to make life better?
3. How is a relatively free market economy linked to the concept of a business owner being a servant to his customer, i.e. the principle that he who waters others will himself be watered?
4. When considering the rule of law that must accompany a market economy to be biblical, which categories of laws most stood out to you as essential?
